* Q3 underlying sales up 3.5% on two year basis
* Strong performance continued in September
* Raises full year profit outlook
* Aims to double turnover by 2026
* Shares hit record level
(Adds share price hitting record level)
By James Davey
LONDON, Oct 5 (Reuters) - British baker and fast food chain
Greggs set out an ambitious growth target as its raised
its full-year profit outlook on the back of strong trading in
the latest quarter despite staffing and supply chain disruption.
Shares in Greggs rose as much as 12%, hitting a record high
and extending 2021 gains to more than 75%, after the group
detailed a plan to double annual turnover to about 2.4 billion
pounds ($3.27 billion) by 2026.
Greggs, best known for its sausage rolls, steak bakes, vegan
snacks and sweet treats, plans to accelerate its rate of net
shop openings to about 150 per year from 2022 from 100 in 2021
and sees potential for at least 3,000 shops from 2,146
currently.
The group also plans to extend evening trading to more shops
and build on the success of a delivery service in partnership
with Just Eat that has already been rolled out to 943
outlets.
In the long term it sees potential to expand overseas.
Greggs' third quarter like-for-like sales rose 3.5% compared
to two years ago, before the pandemic impacted trading.
It said growth was particularly strong in August when a
"staycation" effect was evident and remained in positive
territory in September, with two-year like-for-like growth of
3.0% in the four weeks to Oct. 2.
However, the group said it had not been immune to Britain's
well documented pressures on staffing and supply chains, and had
seen some disruption to the availability of labour and supply of
ingredients and products in recent months.
"I wake up every morning and I find out what's short that
day because something has been disrupted in the supply chain,"
CEO Roger Whiteside told Reuters.
"There's some different thing going on every day, with some
different item."
Despite acute pressures in the pork industry, he said
supplies of sausage rolls were safe.
Food input inflation pressures were also increasing.
Greggs has short-term protection due to its forward buying
positions but expected costs to increase towards the end of 2021
and into 2022.
Whiteside said he hoped Greggs could avoid passing this on
to consumers.
"We have to watch the market. Greggs is a value leader so
what we won't do is allow our leadership in value to be eroded,
he said.
Despite all the disruption Greggs said its operational cost
control has been good and subject to any unexpected COVID-19
disruption expected the full-year outcome to be ahead of
previous expectations.
Prior to Tuesday's update analysts' average forecast for
full-year pretax profit was 133 million pounds, according to
Refinitiv data, versus a 13.7 million pound loss in 2020.
($1 = 0.7344 pounds)
(Reporting by James Davey, Editing by Paul Sandle, Kirsten
Donovan)